Heads are starting to roll at Koito Industries after the Japanese firm admitted to falsifying records on 150,000 seats on 1,000 aircraft in the world fleet. And it's easy to see why.
If EASA and the FAA issue airworthiness directives covering the modification or removal of seats that weren't tested properly before shipment to Airbus and Boeing, it could get VERY pricey for the industry indeed.
Just how pricey, RWG? Well, let's do the math.
Airlines pay approximately $1,500 for Y/C seats and anywhere from $5,000 to $10,000 for B/C seats.
In a worst case scenario, where an AD calls for the replacement of 150,000 seats, the cost for new seats alone would be in the arena of $300 million. And then there's the in-flight entertainment (IFE) costs! And the cost of taking aircraft out of service for modification. And the cost of modification. And yada, yada, yada.
Some folks in the industry believe the price tag of an AD could be somewhere around the $0.5 billion mark.
Of course, this could mean a windfall for seat manufacturers like Zodiac, Recaro and B/E Aerospace.
Business Week reports that Koito intends to complete the first phase of safety checks by the end of May.
Meanwhile, the prez of Koito is taking a pay cut. Best to start bolstering those cash reserves now, eh Koito?
(Photo above from PYONKO's Flickr stream)